Morgan Stanley signalled a huge red flag for Under Armour

One of Under Armour’s biggest growth opportunities — its women’s business — is losing steam.

Under Armour (UA) saw a 7% decline in women’s apparel in the first quarter, following a 6% decline in the previous quarter, according to SportScan data cited in a Morgan Stanley report.

“UA’s ‘young, hungry and fearless’ brand image may not be resonating with females and at the same time, the competitive landscape in that space has become intensely crowded,” analysts wrote in a report.

Overall, Under Armour saw a 2% decline in wholesale apparel, indicating that it “is losing market share for the first time in three years,” according to the report.

The data continues a downward trend for Under Armour’s women’s business, despite the company’s pledge last year to grow its women’s segment to as large as its men’s segment.

Under Armour has been investing heavily in high-profile endorsement deals with female athletes and supermodels, including ballerina Misty Copeland and model Gisele Bündchen, and in 2014, the company launched its biggest-ever global women’s marketing campaign.

But Under Armour’s fashion sense is lacking when it comes to women’s clothing, according to Morgan Stanley, which reiterated its “underweight” rating on Under Armour’s stock on Monday and cut its price target in half, from $64 to $32.

Under Armour’s stock dropped nearly 6% on Monday.

“We think UA products for women are lacking the fashion component today’s consumer is demanding and can now easily get from the multitude of new brands that have emerged as legitimate competition,” analysts wrote. “UA is attempting to fix this issue, but it is unclear if it will work. If it does not, we think it will be hard for UA to replace the growth it is expecting in this category.”

Analysts said women’s apparel accounts for 20% of the sales growth Morgan Stanley forecasts for Under Armour over the next 4 years.

Under Armour has said it expects revenue growth of about 25% to $4.95 billion for the year, and operating income to grow 23% to $503 million.

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